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What’s up?
Anyone working in Switzerland and connected to a pension fund will now be able to pay a maximum of 7,056 francs per year into a tax-deferred Pillar 3a pension plan. The entire amount is deductible from taxable income. This saves approximately one-quarter to one-third of the amount paid. However, you must have paid this amount by the end of the year at the latest, otherwise you cannot benefit from tax deduction. It is not possible to make additional payments. This must now change: in future, missed deposits should be allowed to be made up over a ten-year period and be tax deductible in the same way as regular 3a deposits.
Is this immediately valid?
NO. For this, changes need to be made in the relevant regulation. The Federal Council launched a consultation on this issue on Wednesday. Parties and interested parties will be able to comment on this issue until March 6, 2024. After this date, the Federal Council will decide.
Who benefits from the change?
Just a few. Additional payments to column 3a should only be possible if the maximum amount (7,056 francs) has already been exhausted. For example, if you pay only 3,000 francs in 2024 instead of the maximum possible 7,056 francs, you can pay the remaining 4,056 francs in 2025 (or by 2034 at the latest). However, this is only possible if the maximum amount of 7,056 francs has been paid in 2025. According to the most recent tax statistics available (as of 2019), approximately 10 percent of taxpayers pay the maximum amount. Only for this minority are additional payments even an option. The Federal Council itself writes that only households with taxable income over 100,000 francs per year can benefit.
So why is the Federal Council doing this?
Because the Parliament obliged him to do so. In 2020, the National Council and the Council of States adopted a motion by the Council of States Erich Ettlin (Centre, OW) demanding exactly this. Ettlin argued that subsequent payments could strengthen the retirement conditions of people who did not consider pillar 3a in their youth. The same applies to those who do not have the opportunity to do so, for example as self-employed individuals, or who do not have the right to payments as non-working mothers.
Sounds reasonable, why is this change still controversial?
SP criticizes that the proposal “only benefits the richest taxpayers” but leads to tax losses “suffered by the entire population”. The trade union federation criticizes the preference for private service provision while the solidarity-financed AHV is constantly weakened. But this argument is also propaganda regarding future AHV votes. Especially since pattern 3a does not affect AHV at all. However, it is true that the new 3a regulation will allow new tax optimization: You can make the 3a payment in the years when the income is highest. The saving effect is highest due to tax progression.
Last year I forgot to pay Column 3a. So can I do this when the change is rolled out?
NO. According to the proposal of the Federal Council, only the 3a contribution gap “resulting from the entry into force of the new provisions” can be closed. Assuming that the Federal Council will put the change into force in 2024, you can make up the 3a deposit you forgot in 2024 in 2025 at the earliest. Previous gaps cannot be closed.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
